Fear not, I will eat my hat on video. Just give me a day or two. In today’s podcast I look at my macro assumptions for 2021 and a few stocks that come out of them as obviuous longs or shorts. Natch Red Rock Resources (RRR) of hat-eating infamy is in the former category big time. No sniggering at the back. And talking of videos, there is another coming on New Year’s Day which will enrage our in house Euro loon Jonathan Price.
Sorry to the in-house Euro loon Jonathan Price who reckons that my interest in the US election is excessive but two new polls yesterday cast further light on the races in Pennsylvania and Florida which
as I noted yesterday are two of the three states that will decide the election. I discuss this and then Justin Urquhart Stewart on gold where he gets his numbers so wrong that I am more bullish than I was as I think this tells you something of wider import. Finally onto my good mate the Sith Lord Zak Mir, a chap called Carl Linton who is a plumber and heating engineer, and the current mood of market craziness.
After two decades, the euro’s decision making elite look set to drive the Eurozone into deep trouble. December was the last month of the ECB’s monthly purchases of government debt. A softening global economy will increase government deficits unexpectedly. The consequence will be a new cycle of sharply rising bond yields for the weakest Eurozone members, and systemically destabilising losses in the bond portfolios owned by Eurozone banks...
I wonder if this reader is Malcolm Stacey in disguise? He seems a terribly optimistic fellow dismissing all my bear points made in today's bonus bearcast. Calling himself "KeepingTWhonest" he opines:
There is a tendency to look at the gold price in US dollar terms simply because that is the currency it nominally trades in within the bullion wholesale market. The bias is reinforced by the headline writers who do likewise… yet meanwhile in other currencies gold has been in a stealth bull market these last 4 years.
I travel Easyjet (EZY) often. In the winter it is Bristol to Athens and back, in the summer it is Gatwick to Kalamata and back. Usually it is no worse and no better than any other budget airline. Not that I really care but I just want to point out a quite obvious scam it inflicts on its passengers.
I start with the myth which Julian Richer is trying to perpetuate that you can somehow stop large scale, 100% legal, tax avoidance by folks like Sir Phil Green or indeed the legal stuff we all engage in by using dividends in private companies, etc. Then I ask if Italy might break the Euro or even the EU who are behaving - again - with shocking contempt for the little people. It should. Will it? Finally...98% of bearcast listeners have NOT yet sponsored myself and Brokerman Dan for our 30 mile Woodlarks walk. If you enjoy bearcast I am sure you can spare a tenner so donate HERE - to those who have donated I say thank you.
I have been a bit of a fan for gold stocks – through thick and thin – for perhaps too long. In hindsight I wish I’d sold out in 2011. However, I’ve been further chewing over the podcast from Pallisade Radio with Jordan Roy-Byrne which went up on ShareProphets since last week since my observation that gold stocks appeared to offer an opportunity.
Around this house lie various piles of coins. I just leave them lying around, out of the reach of Joshua who would try to eat them, but, I admit, it is not a great sign of a sharp financial brain. A few year ago a girlfriend tried to counter this by giving me three piggy banks to leave around the house, as you can see below.
I start with a look at the weekend's events in what could be, and should be, the Catalan Republic. It shows our political leaders, but especially those in the EU, in the worst possible light. If the Catalans do go it alone it has massive implications for the Euro which I discuss. Then it is on to PCG Entertainment (PCGE) where I declare an interest but try to be objective in a detailed analysis. There is a similar biopsy but it could soon be an autopsy on Starcom (STAR). I also cover Falanx (FLX) "the flea jumping" - a stock we own - and comment on Advanced Oncotherapy (AVO). I have remembered what I forgot at the end and will cover it tomorrow.
Of course the slide of Sterling - as I explained in full HERE - is nothing to do with Brexit. It started months and months before the vote when the polls showed we were certain to stay in the Evil Empire. It is, as I pointed out, to do with base rate expectations and growing fiscal imprudence in the UK. But still the BBC and other fake news outlets such as Channel 4 say that it is down to Brexit.
In ways conscious and subconscious, we're becoming aware of the signs of growing instability around us. Like a flock of sheep catching the scent of an unseen predator, right now we’re collectively becoming increasingly nervous and stressed. People’s tempers are short with each other, criticisms fly easily, and stances are becoming hardened to ludicrous levels. Many don’t know why they're unhappy because they're unable to identify the source. Monetary printing experiments like those currently being run by the world’s central banks are the ultimate form of self-delusion. Money is the most potent form of social communication, underlying all contracts and agreements. Violate those sacred natural laws and eventually social cohesion and commercialism falls apart, as we are seeing happen in real-time in Venezuela right now.
When the Brexit remoaners paper of choice, The Guardian, suffers an internet glitch there is always the lamentable Independent which serves up a daily diet of fake news on all matters European. Yesterday we learned that Southern Salads, a Kent firm, had gone bust and 250 ex workers could thank Brexit for it all. Well that is the Indy line, except that it is palpably false. It is just made up news. Fake news at every level.
A 10:15am “Trading Update” announcement from restaurant group Comptoir (COM), which IPO’d at 50p per share on AIM less than a year ago. An unusual time for a trading update + a restaurant group, with all the pressures facing that sector currently = I think I can guess much of how the announcement is going to go…
Dreary remoaners such as Pizza Hardman Darren Atwater and the rest of the liberal media elite keep on saying that Brexit has cased the pound to tank against the Euro. After another taunt from Darren yesterday I bring you the chart below, just to help him move out of the post fact era.
Hello Share Tasters. At the big UK Investor Show, just gone, I confided on the stage that I’d invested in Sula (SULA), a gold and iron company, because I read a piece from Uncle Tom on this tremendous website. This quoted another expert who felt that Sula was a possible ten-bagger in the making.
In the past, the Americans have vigorously supported a compromise over Greece because, along with the rest of the political establishment, it views preserving the euro and the European Union as a strategic imperative of over-riding importance. But Trump doesn’t like the EU. Trump has made it very clear that he is very hostile to the EU. He backed Brexit, appointed an ambassador who believes the euro is destined to fall apart, and started a rhetorical trade war with Germany. In response, EU leaders, from Germany’s Angela Merkel to France’s François Hollande, have been fiercely critical of Trump. Relations between Washington and Brussels have probably never been worse.
The Euro could "collapse" within the next 18 months, the man tipped as the next US ambassador to Brussels has claimed, adding that he would "short" the EU single currency if he was an investor. Prof Ted Malloch, a former Oxford University professor now at University of Reading, added that the UK and US could cut a bilateral trade deal inside 90 days and that elections in Europe this year could sweep away the EU as we know it.
As discussed HERE and HERE I have been very nervous in the face of the rising tide that is the market of late. Two difficult decisions face the nervous investor – the first, obviously, is what to sell and the second is what to do with the proceeds. I did make a couple of wild plays and promised to keep you posted. So here we go with another update….
Once again I am sitting here in Shipston with a live audience of one, my father. So we have his take on George Michael - mine is HERE. My views on Syria are referred to in the podcast and the article I mention is HERE. Then I go onto my 8 macro calls for 2017 covering Europe and the Euro, interest rates, corporate earnings visibility, fraud & bankruptcies, house prices, shares, gold and oil.
The EU and the euro project have been an economic disaster for all participants, including Germany, which will eventually be forced to write off the hard-earned savings she has lent to other Eurozone members. We know, with absolute certainty that the euro will self-destruct and the Eurozone will disintegrate, only the timing is debatable. We know this for one reason above all, the political class and the ECB are guided by economic beliefs mascarading as theory which will guarantee this outcome. Furthermore, they insist on using bogus statistics that are used to reinforce inappropriate and illegal policies.
I previously pondered (HERE) what to do with markets seemingly (in my view) overvalued and due a correction. Taking cash off the table is the easy part (once one is resolved to sell up, that is) but where to put it was a bit of a question. Government bonds and cash offered little to nothing and in the wake of the Sterling flash crash it seemed that even cash wasn’t all that safe!
Hello Share Scrapers. The Dow continues to fall. The days when it topped 18500 seem long gone. Happily, the progress of America’s big indicator no longer seems to influence British shares very much. Perhaps it’s because the Brexit vote has given us more of an independent status in the eyes of big investors.
Malcolm Stacey kindly took the trouble to comment on my piece of Tuesday when I confessed to a bout of extreme nervousness in the wake of the FTSE100 again breaching the 7,000 mark. Answering my concerns the next day, Malcolm was still in upbeat mood. But perhaps not quite as upbeat as we might think: I sense that the ShareProphets uber-bull may be preparing the ground for a spot of nervousness himself, with his suggestion that the markets will continue to rise this side of Christmas. What comes after that?
Yes I am beginning to miss George Osborne. No I lie, he really was useless. But so too is Hammond. I comment on him believing the boy who cried Euro Wolf (Nissan) and handing over taxpayers cash as a result but also on the way that he is set to allow the deficit to balloon again - this man is a danger to your wealth. At a company level I look at Inspirit (INSP), Cloudtag (CTAG), SKIL Ports and Logistics (SPL), Quantum Pharma (QP) and my pals the fraudsters as African Potash (AFPO) - Lord Peter Hain when will you blink and quit?
Shares in marketing communications group, Creston (CRE) are currently recovering towards 100p following its announcement of results for the year ended 31st March 2016 and CEO’s statement that “despite still having work to do, we are looking forward to continuing… progress in the coming year and I believe that we are in a good position to capitalise on the positive work already achieved”. Hmmm…
Hello Share Swelterers. I don’t much like the name of today’s firm I offer for your consideration. You see, I don’t admire company titles which are hard to remember or even say because they don’t conform to the rules of grammar. The company is FairFX (FFX) which is a prime offender reference my aforementioned prejudice. But having said that, this share is fashionable. That’s because of the EU referendum. If we leave Europe, the pound is expected to take a hit. I dunno why exactly, as the Euro should also be damaged by one of its biggest members leaving. But there we are.
The Brexit vote is a distraction and we are in danger of the distraction of reorganising the pebbles on the beach whilst a great tsunami bears down behind us. Rather than focusing on whether or not we should remain in Europe, the decision should be more about how we participate and ultimately shape the economic grouping that will come after the Euro single currency breaks up and the European community has to become more accountable and economically functional.
I first suggested a three-times leveraged ETF with the ticker code SEU3 as a trading idea back in July (see HERE). It was not suitable for everyone due to the complexity and wild volatility of the product, but it has been profitable. The following updates as I consider banking gains and where to get ideas for what to do now.
In today's podcast I look at the Portugal Coup and what it means for the EU and the Euro. Then onto profits warnings and where I see equities going and finally a note on Mark Carney, UK base rates and UK house prices.
Prelude: I fall in love with Angela - I have just been listening to Mrs Merkel droning on about how the EU has reached agreement with Greece. This is an agreement to…er…begin negotiations on a final settlement and lend them yet more money. With tennis still in the mind it really is the moment to say “You CANNOT be serious!” But she is. They all are. These are the same people who told you in 2010 that Greek debt could not be restructured. I have lost count of how many times it has been restructured since.
Hello Share Scribblers. I’m getting really worried now about the effects of the booming pound sterling on our share values. The rate is now around 1.43 euros to the pound. Yet it doesn’t seem too long ago that a pound was only worth one euro.
Since the Dax, peaked at 12,390 on 10 April, Germany’s major index of 30 blue chip stocks has been dragged lower by the troubles in Greece. Having started the first quarter of the year in such spectacular form, thanks to the generosity of the European Central Bank’s (ECB) Quantitative Easing (QE) programme, the Dax has since become a victim of the spiralling Greek Tragedy. July has been an extremely volatile month for German stocks and the Dax’s near-term prospects appear very much pinned to the outcome in Greece. On Wednesday 15 July the Dax closed at 11,539, right above a crucial level of MIDAS resistance. A retest of this level in the coming weeks could open up a highly attractive shorting opportunity, as it would suggest a worsening in macro conditions.
Hello Share Plungers. We’re told by the International Monetary Fund that Greece will never be able to pay back its big debt and that creditors should be willing to take a haircut. Sense at last, but with the Germans in a bloody frame of mind towards the Greeks, that short back and sides will not be forthcoming.
Last week I offered a highly leveraged trading idea of ETFS Foreign Exchange Ltd 3 x Short Euro Long $, which is traded on the LSE under ticker code SEU3 (see HERE). The rationale was simple enough: Grexit, credibility of the Eurocrats and the popping of the China bubble which may trigger a flight to safety. As it happens – and seemingly against the odds – it looks as though Greece will now continue in servitude for another while, albeit compounded by tighter demands and national humiliation. Meanwhile the Chinese authorities have gone into Canute mode.
#Thisisacoup is trending on twitter. Greece is now ruled by the EU. Democracy means nothing. The package agreed by Alex Ephilates Tsipras will destroy hope and add to misery in Greece. There is no debt relief. The problems of Greece, for the country, its people, my friends and neighbours, are not solved but the Euro is saved (for now). For Greece, my father and I are agreed (for once), we shed a tear. The Euro may have rallied but Greece is not fixed. Just fucked. Comment and analysis on what happens next.
To recap: 61% of Greeks voted Oxi (no) to a nasty bailout package last Sunday. Treacherous PM Alex "Ephialtes" Tsipras then ignored their wishes and proposed an even worse deal which 79% of Greeks oppose, according to a poll out today. And in Brussels just now it seems that Greece has agreed to an even worse package than the second Ephialtes deal which it will start implementing next week in order to get a bailout. But even this most brutal of rogerings and abject humiliations for Greece may not save it.
A brief podcast as I prepare to spend a morning on the beach with the Mrs. Then it is off to Athens. She thinks she is seeing a la dee da play. I am heading there for riot porn as the Greece Grexit crisis hots up again. Is Tsipras planning to betray the Hellenic Republic? Will he get away with it? Will Greece be booted out of the Euro anyway by the Krauts? Then a few words on the farce at Sefton as Jimmyliar Ellerton tries to make it go bankrupt via legal means. And then to the con Worthington.
The price action in gold this week has been most counter-intuitive. As Chinese markets go into meltdown and Greece does its best to get kicked out of the eurozone, the last thing many would have expected would have been for the precious metal to fall in value. The uncertainty in the market is palpable. Equities have been extremely volatile, the VIX has shot up to 19.97 and pressure is clearly growing on global bond prices. But gold has remained immune to the growing panic; that is so far, at least.
I was greatly amused by a link to a Monty Python sketch linked by the Torygraph at the weekend as part of its Greek crisis coverage. It seems such a perfect allegory – you can watch it HERE – in pointing to the inability of anyone just to play the ball. Instead we have the Eurocrats pontificating on how debt relief is not technically possible, immoral and how it would destroy the credibility of their beloved Euro. Credibility? It seems to me that whatever the outcome (and Grexit is now surely all but certain) even the most ardent Euro fan will see that its credibility is holed.
I cannot imagine that the neo-commie Alex Tsipras thought that his biggest fan in the EU was UKIP leader Nigel Farage and poor Tsipras looked a little uncomfortable as Nigel lavished him with praise in the European parliament today. Tsipras does not wish to leave the Euro but Greece needs him to "lead it out with pride" as Farage rightly said.
I note the attack on me by my colleague Euro loon HERE. Like the heroic ex finance minister of the Hellenic Republic Yanis Varoufakis I regard such an attack from a supporter of the EU and Euro as a “badge of honour.” The zealots who believe in the Euro concoct facts to support their religion. They show no humanity in the face of undeserved misery. The Euro and EU is a dream for crony failed politicians, big business, useless parasitic bureaucrats and banksters. It is a combination of crony capitalism and socialism which screws ordinary taxpayers and benefits the elite. My analysis and solutions are pure capitalism – my critic (a bankster) is a crony capitalist. I care about the poor. My critic is heartless.
Tom Winnifrith sounds like a Marxist. Greece deserves all the misery it gets. This is a tragedy of its own making. That is the view of one contributor to this site. Tom's reply is HERE. Now over to the Euro loon...
As I wander up to the most excellent Anthrapology café one last time for a leave Athens on a boat tonight to continue my odyssey, I stroll past three of four banks and they are open. Well sort of.
Just why did Betfair move so sharply to Oxi! a few hours ago? Er there was a Gallup poll taken on Saturday and released to non insider dealers after the actual poll closed here in Greece. I caught the last voters turning up to have their say at my local polling station and then talked to the precinct captain for Nai.
Like all Hellenophiles my love of Greece is partly a love of the country today and partly a romanticised view of life in Ancient Greece. And so as the Greek referendum looms tomorrow one thinks naturally about how this place is the birthplace of democracy, of rule by the people.
And so I wandered into Omonia Square in Athens, not a place to stroll around for too long. Athens was an all almost white City thirty years ago. I think my white face was in the minority today. There is an air of menace about the district and I was glad to walk briskly back towards Syntagma Square. But as I looked around I was accosted.
Think Stoke Newington in London. Edgy, lefty but with a stack of affluent middle class Guardian readers among the poor. That’s the sort of neighbourhood of Athens in which I am staying. Everywhere there are Oxi posters – this area is voting No heavily in the referendum on Sunday. Even the businesses display posters – they are not afraid of losing customers because this area is heavily Oxi. One poster (see below) says nothing but says it all.
The Mrs has given me the green light and in fact is almost certain to join me as I head off to Greece ahead of Sunday’s referendum for a touch of riot porn and poverty porn blogging from Syntagma Square in Athens.
I do not have a scooby about forex trading I just feel happy to see the Euro go down against Sterling and look forward to a day when the drachma sinks even faster. SwissQuote was the main sponsor of UK Investor Show 2015 and held a session to explain what is happening in forex to the attendees. Watch & learn.
After yesterday's podcast, it was put to me by a Euro loving loon (but good man) on twitter that Greece defaulting on its debts and leaving the Euro would be bad news for me, as my wife owns a small property in Greece – the Greek Hovel. He is correct: anyone with Greek assets would take an immediate hit after Grexit. But here is why I support the move anyway.
Hello Share Shovellers. As a fairly frequent traveller in Europe, I am cheered by the new value of the pound against the euro.
As a hardline Austrian economist, who makes Tom Winnifrith seem like a Big State Keynsian, it will not surprise you to hear that I think that the Euro mess is far from played out and that the effects on oil, copper and other commodities will be profound. Of course the big winner will be gold.
Sentiment is no longer bullish after a series of negative developments. Concerns are emerging about the possible impact of the decline in crude oil and the Swiss National Bank's decision to abandon the euro cap. My sentiment indicator is neutral but if the stock market trend has turned down as I believe this indicator will turn down to confirm the downtrend.
City forex dealer Alpari has today gone bust, fessing up to taking a £30 million hit as the Swiss depegged its franc from the Euro . the ripples of this mess will spread out to the Academy that is Upton Park in East London.
Just a short BearCast Special on the situation in Greece with another election now looming in late January. What does it mean, who will win, will it mean the beginning of the end of the Euro and gow does it affect us? From a man who lives in Greece for a good part of the year and is an ardent Hellenophile if a profound Eurosceptic a few thoughts.
Is it a man? Is it bird? Is it Michael O’Leary? Is it the Ryanair (RYA) share price?
WPP interim results are a classic example of what the strong pound has been doing to British overseas earners. Thank God the minority of two on the Bank of England rate setting Monetary Committee did not persuade the rest to raise interest rates when the Committee met recently. Life is tough enough for companies such as WPP (WPP); most of its top line revenue comes from overseas. In the six months to June 30 this was reported up 2.7%. However, if it were not for the painfully strong Sterling exchange rate, revenue, we are told would, have risen a staggering 11.3%.
Malcolm Stacey is a great man and one of the nicest guys in shares. But his bullishness about equity markets is wrong. And here is your 10 point checklist as to why it is right to be bearish.
What we want is a lower pound dollar and Euro exchange to stimulate growth and investment. Goods and services purchased by overseas people who are not borrowing from UK Banks to finance it. But then the UK economy is a bit of a mystery at the moment. Entirely appropriate for the land that gave birth to the Arthurian legend of the Wizard Merlin